eBay to Lay Off 4% of its Workforce, CEO Confirms

E-commerce company eBay announced that it will be cutting 5% of its workforce globally, affecting 500 employees. This is an effort of the company to reduce costs as it continues to experience slower consumer spending post-pandemic.

Laying Off eBay Employees

Chief Executive Officer Jamie Iannone released an internal memorandum to employees saying that eBay decided to make job cuts. According to a report from Reuters, this will affect 4% of its workforce or 500 employees.

"This shift gives us additional space to invest and create new roles in high-potential areas - new technologies, customer innovations, and key markets," Iannone stated. eBay will now focus more on the company's areas and sectors that are needed to make the most impact.

This will strengthen the company's ability to deliver the best experiences to its customers after evaluating the global macroeconomic environment for the past few months. He added that this decision is necessary for the company as it will help them to create long-term sustainable growth.

EBay becomes the latest firm to join other big companies to reduce costs by laying off employees. The company faced a decline in sales in the past six quarters when consumers shifted back to spending on experiences like dining out, traveling, and shopping in personal stores.

Analysts reported that eBay is expected to report this upcoming February 22 a revenue fall of 6% to $2.46 billion for the holiday-quarter results. Bloomberg Intelligence Analysts Poonam Goyal and Abigail Gilmartin noted, "eBay's workforce reduction may be a move to streamline operations and make room for new investment focused on elevating the platform's capabilities and visibility."

During the pandemic, Iannone led the company on its campaign to continue the delivery system of eBay across the country. He considered this era of the company as the "multi-year reimagining." During his return on the company, eBay shares rose by over 70%.

Competitors

CNBC reported that this marks the latest round of job cuts in the tech industry, as several companies conducted and announced layoffs this year. This includes Zoom's announced plans to cut 1,300 jobs, Google's plans to lay off more than 12,000 employees, Microsoft's 10,000 job cuts, and Salesforce's 7,000 laid-off workers.

But aside from these mentioned companies, eBay's known rival in the retail market, Amazon, has been reported to cut jobs that will affect 18,000 employees. This decision comes after online sales dropped 2% during the holiday quarter.

This marks the biggest Amazon layoff in the company's history. Chief Executive Officer Andy Jasy stated, "Amazon has weathered uncertain and difficult economies in the past, and will continue to do so."

The mass layoffs of the company fell on the company's retail division and human resources. Jassy added that affected workers would be assisted before the termination. Assistance includes transitional health benefits, severance pays, and job placements in other companies.